RIYADH: The Public Debt Management Office of Dubai’s Department of Finance announced that it expects a reduction of about 29 billion dirhams ($7.89 billion) in public debt by the end of the year.
This aligns with the office’s Public Debt Sustainability Strategy and its commitment to responsible financial management, reported the Emirates News Agency or WAM.
The reduction in public debt is projected to be achieved across all classes in the government’s portfolio.
The strategy includes a 100 percent redemption of sukuk certificates worth 3.3 billion dirhams and the repayment of bilateral and syndicated facilities amounting to 5.2 billion dirhams.
The report added that it comprises a partial settlement of 20 billion dirhams from the financing extended by the Abu Dhabi government and the Central Bank of the UAE.
“Despite ongoing global economic challenges, DOF not only achieved financial efficiency for the Government of Dubai but also seized opportunities from adversity,” said DOF Director General Abdulrahman Saleh Al-Saleh in a statement to WAM.
“The support received from the leadership has enabled us to achieve rational spending on projects, improve and diversify revenues, and optimize the use of financing instruments. This has facilitated the fulfillment of government financial obligations according to the scheduled dates, in addition to accelerating the fulfillment of some other obligations,” Al-Saleh added.
PDMO CEO Rashed Al-Falasi said the office’s objectives include reducing borrowing costs, mitigating refinancing risk, and ensuring the government’s financial stability in the medium term.
“One of the pivotal goals realized through debt repayments is the substantial reduction of public debt levels, resulting in a significant boost to government financial liquidity and preparedness to meet any funding requirement,” said Al-Falasi.
He added: “This strategic maneuver has led to a remarkable reduction in the public debt to gross domestic product ratio, which now stands at a safe and conservative level of 25 percent.”
It’s noteworthy that internationally recognized thresholds typically range between 40 and 60 percent, underscoring Dubai’s prudent fiscal management.
Established in 2022, PDMO aims to shape robust public financial policies and foster confidence among investors and financial institutions by maintaining high transparency and credibility.